Hyatt has offered the most lucrative hotel loyalty program among the ‘major’ chains for the last decade, owing primarily to:

• Suite upgrades confirmed at booking whenever standard suites are available
  
• Full breakfast not merely continental

They’ve added upgrades to suites at check-in and a dedicated concierge for top tier elites as part of their World of Hyatt program revamp. The concierge benefit offered at their 60 night elite level compares favorably to Marriott, which will begin requiring not just 100 nights but also $20,000 spend to access a similar Ambassador benefit, although the rollout of My Hyatt Concierge has been rocky.

It’s a program that is well matched to an upscale hotel chain, however:

• Hyatt’s growth has been largely in the limited-service sector
  
• Their footprint is much smaller than major competitors, with their 700 properties comparing to 6500 Marriott hotels

The World of Hyatt program also made elite status too tough to earn (eliminating 25 stay qualification, and bumping up required nights from 50 to 60) but they’ve taken care of that for U.S. members with the relaunch of the World Of Hyatt Credit Card, a card that gives you 5 elite night credits every year and an additional 2 elite nights for each $5000 spent.

Hyatt tried to acquire Kimpton, and Starwood, and NH Hotels but failed at each. However they’ve been working hard to increase the scope of their footprint for some time. They brought on an innovative MGM M life relationship with points earning and redemption, status earning, and elite recognition. Oasis homesharing gets them 20 destinations some of which are duplicated by their current portfolio.

On this morning’s earnings call they announced a new alliance with Small Luxury Hotels of the World to allow points-earning, redemption, and elite stay credit at those 500-plus properties. This is potentially a big deal, but there are open questions that I’ve reached out to Hyatt to better understand that will determine whether this is transformative or not very useful at all.

• Towards the end of this year Hyatt and Small Luxury Hotels of the World will offer World of Hyatt earning and redemption at participating SLH hotels when members book through Hyatt channels.
  
• SLH bookings made through Hyatt channels will earn Hyatt elite night credit.

Elite earn at 500 more hotels is potentially very useful. However,

1. We don’t yet know how many or which SLH properties will actually be covered. The Hyatt booking channel requirement is likely a mechanism for tracking and crediting commissions to Hyatt, and properties may need to opt into this.

2. The requirement to book through Hyatt is potentially problematic if it means paying higher rates (e.g. giving up SLH’s own direct booking member rates)

3. There doesn’t appear to be a recognition component for Hyatt members. And SLH’s own members get benefits even at the base level, complimentary breakfast and free wifi with their first stay. MGM allows Hyatt points and elite earning while benefiting from MGM status. If Hyatt members lose breakfast and internet and pay more by giving up direct booking rates that’s going to be a deal killer for most.

4. We don’t know anything about earn and burn rates, we’ll soon find out whether these properties will essentially become part of Hyatt’s redemption charts of if they’ll instead offer a fixed point redemption for what amount to SLH hotel property gift certificates as they do with Oasis (representing poor value).

SLH properties are independent hotels, many of them quite nice, that belong to this group as a marketing service. The looser relationship may make the kind of chain consistency brands like Hyatt strive to offer tougher. However SLH’s own program does offer potentially lucrative benefits, honored to varying degrees across properties.

How this is implemented will matter a great deal and we’ll hopefully learn more soon. Expansion via alliance is useful — but best executed in the manner of Hyatt’s relationship with MGM where there’s status recognition as well as earn, burn, and status accrual as part of the package.